3. Demo Problem -Business Income

3. Demo Problem -Business Income - 1 BUSINESS INCOME...

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1 BUSINESS INCOME DEMONSTRATION PROBLEM Has a Business Commenced? Mr. and Mrs. Taxpayer, each of whom had worked in the computer industry for over ten years, purchased a farm in 20X1 with the objective of developing a business as horse breeders and trainers. They traveled to Europe on several occasions prior to purchasing the farm to gather detailed information on breeding practices, etc. They quickly developed a respected reputation in regional equestrian circles for the quality of care and training they gave the horses stabled on their farm. However, the venture was not profitable. Their annual losses averaged $15,000 from 20X1 to 20X8. The 20X8 loss of $9,575, however, was their lowest since the business commenced. In order to meet their considerable expenses, the Taxpayers built a successful consulting practice in the computer field. Approximately one-half of their time was devoted to each activity. Required:
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This note was uploaded on 01/07/2012 for the course ACCT 4453 taught by Professor Gorman during the Spring '11 term at Dalhousie.

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3. Demo Problem -Business Income - 1 BUSINESS INCOME...

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